Bulls, Bitcoin, & Beyond

Market Moves Yesterday

S&P 500 @ 5,186.33 ( ⬇️ 3%)

Nasdaq Composite @ 16,200.08 ( ⬇️ 3.43%)

Bitcoin @ $55,560.51 ( ⬆️ 2.81%)

Hey Scoopers,

Happy Tuesday! Are you ready for a chaotic week in the stock market?

👉 Tech stocks tumble

👉 Palantir surges post Q2 results

👉 Bitcoin liquidations drive prices lower

So, let’s go 🚀

Market Wrap 📉

Stocks fell sharply on Monday, with the Dow Jones Industrial Average posting its worst day in almost two years as the possibility of a U.S. recession sparked a global market sell-off.

Japan’s equity market fell over 12.5% on Monday, its worst decline since Wall Street’s Black Monday, and has gained over 10% today.

In addition to a disappointing July jobs report, investors are worried that the Fed is behind in cutting interest rates amid cooling inflation and sluggish consumer spending.

Chatter about the yen carry trade unwinding also added fuel to the market decline. The Bank of Japan raised interest rates last week, reducing the rate differential between Japan and the U.S. and contributing to an appreciating yen.

Finally, the Cboe Volatility index was around 38 at the time of writing, but it climbed to 65 on Monday, the highest level since the early days of the COVID-19 pandemic. The VIX index is called Wall Street’s fear gauge and is based on market pricing for options on the S&P 500.

Trending Stocks 🔥

Kellanova - Shares spiked over 12% after reports stated that Snickers and M&M’s maker Mars is exploring a potential takeover of the company.

Crypto stocks - Falling BTC prices meant crypto stocks such as Robinhood, MicroStrategy, and Coinbase reported significant declines.

AI Stocks - Overvalued AI stocks such as Nvidia, Super Micro Computer, Taiwan Semiconductor, and Arm Holdings lost over 5% amid the market sell-off.

Palantir Tech Raises Annual Revenue Forecast

Palantir Technologies raised its annual forecast for the second time in 2024, indicating that the generative AI boom is driving software services demand. The tech stock is up almost 11% in pre-market trading today.

Palantir expects annual revenue between $2.74 billion and $2.75 billion, above estimates of $2.70 billion. The data analytics giant also forecast Q3 sales above estimates and reported its largest-ever quarterly profit in Q2.

In the June quarter, it reported:

👉 Revenue of $678 million vs. estimates of $652 million

👉 Earnings per share of $0.09 vs. estimates of $0.08

The tech giant aims to reduce dependence on government clients which accounted for 54% of total sales.

Palantir stock is up over 40% in 2024 despite ongoing market weakness that has driven valuations lower.

Oil Moves Lower and Services Index Exceeds Estimates

U.S. crude oil followed the equity markets lower on Monday, touching a six-month low on recession fears. The West Texas Intermediate contract for September closed at $72.94, its lowest settle since February.

WTI has erased its gains for 2024 and is up just 1.8%, while Brent is marginally lower year-to-date. The OPEC+ was planning to start raising production in October, but these plans may now be shelved.

Elsewhere, the U.S. services sector expanded at a faster-than-expected pace in July, registering a 51.4% reading. This is higher from 48.8% in June, while estimates were lower at 50.9%.

The employment index rose 5%, coming out of contraction (below 50%) for a reading of 51.1%. Moreover, business activity and new orders indexes came out of contraction, while inventories, new orders, and backlogs saw sharp gains.

Bitcoin Remains Volatile

The Crypto Fear & Greed Index just tipped into “Extreme Fear” for the first time since 2022 after spot Bitcoin ETFs reported outflows of $168.4 million yesterday.

The index measures market sentiment for the world’s largest digital asset and fell to a score of 17 out of 100, the lowest since July 12, 2022. Comparatively, the index score was 67 at the end of July marking a huge week-to-week decline.

Additionally, spot Ether ETFs saw a $48.8 million inflow even as the second-largest crypto slumped 18% in a two-hour turbulent window.

Around $600 million in leveraged BTC long positions were wiped out in what has been described as a one-in-a-ten-year event.

Headlines You Can't Miss!

Saudi Aramco’s Q2 profit dips amid lower prices

Japan’s Nikkei 225 sees best trading day since October 2008

Big tech stocks lose $1 trillion in market rout

CrowdStrike is sued by fliers after outage disrupts air travel

Memecoins tank amid marketwide sell-off

Chart of The Day

The above table shows us that social media giant Meta is betting big on the AI megatrend, investing roughly $10 billion to purchase Nvidia’s H100 GPU.

Other major buyers of AI chips include companies helmed by Elon Musk- xAI and Tesla.

Companies are stockpiling the chips priced at $40,000 to train more powerful AI models and gain traction in the highly disruptive segment.

Meme of the Day

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DISCLAIMER: None of this is financial advice. The newsletter is strictly educational and is not investment advice or a solicitation to buy or sell assets or make financial decisions. Please be careful and do your own research.